I have just returned from a Easter weekend trip to Dublin and unlike in Berlin, paying by card was easily possible in most of the shops, bars or restaurants. Paying with card is definitely more convenient, however, my current main reason for using card instead of cash is adding data to my bank account. While using cash, details about my spending behaviour are lost but with card payment this data is saved and accessible later on.
At the moment the pure benefit of this is that my N26 app helps me to categorise my expenses and that I’ve a nice overview of my total expenses. However, our financial data becomes more accessible thanks to PSD2 and new services are making more and more use of this data. At the moment these services are mostly focused on recurring expenses in order to optimise contracts and help the user to save money, but it’s just a matter of time until new service providers will also offer services on our full “financial footprint”.
In order for this to happen it’s important that the holder of the financial data (e.g. bank) understands the true value of the data and treats it accordingly. Until today the value of financial data has not been exploited much and keeping “the record” was a requirement but not a business purpose. A good example for this is the monthly bulk credit card payments. I’m using a credit card issued by a travel company which helps me saving credit card fees while booking a flight. However, since the monthly sum gets deducted in one sum, the data from each single booking is gone. My N26 app cannot categorise these single payments correctly and my “financial footprint” is inaccurate. This is because no party involved had an interest to move the data but just the payment itself. There was no value in forwarding the data. Personally, I believe removing barriers all around handling and transmission of financial data will be an important post-PSD2 step so service providers can actually make use of our financial footprint and not just payment transactions.
To be continued…
In a previous blog post I have already raised the question when we will finally see a “Spotify of Banking”: a provider of financial services that we don’t want to switch because the service knows us too well and thus creates positive entry barriers for other providers.
I know there are – especially in Germany – many people who don’t like the idea of sharing data. But if you take a look at different industries you can see that services that make use of consumers data is growing a lot, which is an indicator that more and more people are happy to trade their data in return for something.
But trade in for what? In my previous blog post I only talked vaguely about a banking service that makes better usage of financial data and provide a better service. I have taken a look into at some services that I am using that make use of my data and categorised them based on their benefits for me. Basically, there are two main benefits for me: